The Markets Are Heading Straight Up? Think Again

Cha - Ching...Buying the bottom is fun right? Money managers are on their game right? Buying the dps works every time, right?

Hey, I'll pat myself on the back for hitting the bounce point perfectly, but don't get giddy. This Market is not headed back to its highs. I offered you a strategic plan. The plan shows a bounce, but then it shows a very hard fall. Scroll down to read the plan.

Remember what we are facing here: The Investment Rate is telling us that the Market is entering the 3rd major down period in US history. The first was the Great Depression. The Market declined by 75% and it took 26 years to recover from the first major down period. The second was the Stagflation period of the 1970's, and the Market declined by 50% and it took 10 years to recover. Now, according to the IR, we are entering the 3rd major down period in US History. Do you have the stomach to hold your current assets for 10 years or more without making a dime, while watching them decline by 50 - 75%? If you do, then buy and hold strategies are for you.

The IR is a measure of the rate of new money inflows into the Market every year. New money is what drives the market higher, not old money. Since 1900 it has been the most accurate leading longer term economic and stock market market indicator on the street. The problem here is that it is a longer term indicator, and Wall Street is very short sighted. The question you need to ask yourself is...

DO YOU WANT TO BE HOLDING STOCKS AT THE BEGINNING OF THE 3RD MAJOR DOWN PERIOD IN US HISTORY?

Well, do ya?

Find the chart of the IR below, and understand that buy and hold strategies, or buying the dips is a fine strategy when the IR is trending higher. It's been great since 1981. But times, they are a changin'. The IR transitions from upward to downward sloping in 2007. This is the beginning of the 3rd major down period in US History. The revered buy and hold mentality is a mistake at this time. There will be a buying opportunity on the heels of this..but we're talking 5 years from now, or more, not now. This is the beginning of an extremely ugly cycle, and if we're not careful, a Greater De.....

Get liquid, get short, and use our automated trading system to trade this Market. Trading, by far, is the best way to take advantage of the volatility that lies ahead.

Here's the IR:

Strategic plan for 2007:

click to enlarge

Comments

[Randy Kirk]

Interesting -- the investment rate -- I've often thought that this was the key determinant, driving up equity values. I'm wondering, where did you get the IR information?

That is one huge decline in the IR after 2007 -- do you see the same sort of decline in other stock markets around the world? (odd to me that something like the Indian stock market would just start to get going (since 2003) and then suffer a prolonged bear market, if the economy continues growing)